Russian operator Vimpelcom will not be able to keep its proposed $6 billion acquistion of assets of Wind Telecom afloat more much longer in the face of continued opposition from Telenor, Vimpelcom's chief said. Telenor, which is Vimpelcom's second largest shaeholder, has instigated legal actions claiming that Vimpelcom's proposed acquisition is against shareholders' interest.
Reacting to this move, Vimpelcom CEO Alexander Izosimov told the Norwegian newspaper Dagens Naeringlsiv that "patience is starting to end," according to Reuters.
Izosimov said Telenor's reaction to the deal did not serve any purpose other than delaying the transaction. "I was hired as Vimpelcom's top boss with a mandate to grow the company further through mergers and acquisitions and there are few M&A opportunities in the market of this calibre," he said.
However, Telenor's resistance to the deal stems from a discrepancy between economic and voting rights that would arise if the purchase goes ahead. The proposed deal would give Wind Telecom shareholders a significantly higher voting interest than their economic interest--30.6 per cent against 20 per cent respectively.
Telenor has maintained for some time that the Wind Telecom acquisition makes no sense either financially or strategically for Vimpelcom.
The legal proceedings triggered by Telenor also look likely to upset Vimpelcom's ambitions to acquire the Serbian operator, Telekom Srbija, as part of its plans to expand internationally.
While Vimpelcom is the only bidder to acquire a 51 per cent holding in the state-controlled Telekom Srbija for €1.4 billion, the deal is subject to agreement by Vimpelcom shareholders which are seen as not wanting to proceed until a settlement is reached with Telenor.
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